Affordability key as in hotspot towns

The number of towns recording a rise in home sales has more than doubled over the past year, according to research by Lloyds TSB.

Almost two-thirds – 324 out of 500 – of the towns tracked in England and Wales were classified as property sales ‘hotspots’ in the first half of 2012.

This was 115 per cent higher than the 151 towns recording a rise in the same period in 2011.

Researchers say 60 per cent of towns that saw a rise are in southern England, in contrast to last year when towns in the north accounted for a larger share of hotspots.

Prices in the 10 towns that saw the biggest increases stand at an average of 5.8 times local gross annual earnings – nearly a fifth lower than the average multiple of 7.1 among the 10 towns that recorded the largest falls in property sales over the same period.

Prices in the top 10 hotspots have fallen by an average of seven per cent over the past four years, a steeper decline in the towns that saw the largest falls in home sales over the same period, which fell five per cent).

The average house price in the 10 top performing areas stands at £186,940), which is eight per cent (£15,334) lower than in the 10 worst performing locations (£202,274).

Lloyds TSB housing economist Suren Thiru said: “It is encouraging that the number of towns seeing a rise in sales has increased significantly over the past year.

“This highlights the very mixed state of the housing market at a local level compared with the rather subdued picture at a national level. Many top performing towns are in areas where improved levels of affordability over recent years have helped support demand for those able to enter the housing market.